Broker Check

Health Insurance

Health Insurance is another key component of a sound financial plan. Having health coverage in the event of sickness or illness is extremely important. You do not want to be in a position where you must use your strategic reserves to pay for medical expenses you incur.

Health insurance is available in a variety of different of plans: HMOs, PPOs, POS, and indemnity. An HMO, or Health Maintenance Organization, is a plan type where you choose a primary care physician who acts as a gatekeeper for your care. The PCP gives you a referral to see other doctors or specialists. The highest level of benefits is achieved in the specified network. If you would happen to go out of the network, it is a good possibility that you will not have any benefits.

A PPO, or Preferred Provider Organization, allows participants to visit any doctor in the network at any time. In a PPO plan, you do not have to choose a primary care physician to manage your care. In fact, you can even go out of the network if you choose. However, the benefits for out of network care will be significantly reduced.

A POS, or Point of Service Plan, is a blend between the HMO and PPO plans. You are usually required to choose a primary care physician, but you are not required to get a written referral to go elsewhere within the network. Usually, a verbal referral will be sufficient. POS plans also offer out of network benefits which are not as good as the in-network benefits.

Important Health Insurance Terms:

Copay - This is the amount that you must pay for various services. Your plan might have a $15 copay to visit your doctor or a $50 copay to go to the emergency room.

Deductible - This is a minimum amount of money that you must pay out of pocket before co-insurance will begin.

Co-insurance - Once you pay your deductible or copay, you may also be required to pay part of the expenses. For example, if you plan is a 90-70 plan, you would be responsible to pay for 10% of the incurred medical expenses up to your out of pocket max.

Out of pocket max - This is the cap on the amount of out of pocket expenses that you will incur in a plan year. For example, if your plan has a $1,500 out of pocket max, your plan would pay 100% of all expenses once you have reached that amount.

Drug Formulary - This is a carrier approved listing of prescription drugs that are covered by that carrier's health plans.

The Health Risks of Obesity - Worse than Smoking, Drinking, or Poverty

Two RAND researchers, Roland Sturm and Kenneth Wells, examined the comparative effects of obesity, smoking, heavy drinking, and poverty on chronic health conditions and health expenditures.Their finding is that obesity is the most serious health problem.It is linked to a larger increase in chronic health conditions and significantly higher health expenditures.It affects more people than smoking, heavy drinking, or poverty.

Sturm and Wells examined data from Healthcare for Communities, a national household telephone survey fielded in 1998.Approximately 10,000 respondents participated in the survey.Among other questions, the survey asked respondents to self-report on 17 chronic health conditions including diabetes, hypertension, asthma, heart disease, and cancer, height, weight, poverty, smoking status, problem drinking, health-related quality of life, and a variety of demographic factors.

When compared with normal-weight individuals of the same age and sex and having similar social demographics, obese people suffer from an increase in chronic conditions of about 67%.In contrast, the increase for normal-weight daily smokers is only 25% and for normal-weight heavy drinkers, only 12%.Poverty is also a significant threat.The increase in chronic conditions for people living in poverty is about 58%.

Obese individuals spend more on both services and medication than daily smokers and heavy drinkers.For example, obese individuals spend about 36% more than the general baseline population on health services, compared with a 21% increase for daily smokers and a 14% increase for heavy drinkers.Obese individuals spend 77% more on medications.Only aging has a greater effect and only on expenditures for medications.

Not only does obesity have more negative health consequences than smoking, drinking, and poverty, it also affects more people.Approximately 23% of Americans are obese.An additional 36% are overweight.By contrast, only 6% are heavy drinkers, 19% are daily smokers, and 14% live in poverty.

What can you do if you are overweight, obese, or just want to get healthier? Get moving! The average American takes 5,000 steps a day, which is only half of the 10,000 daily steps recommended to achieve good health. For weight loss, 12,000 to 15,000 steps a day will help you achieve your goals. But who has time to count?That's where the pedometer comes in.A pedometer is a little gadget that clips to the waistband of your pants and counts your footsteps by sensing your body motion.They range in price from $3 (the basic kind found at Wal-Mart) to as much as $40 (these include stopwatches, heart rate monitors, and computer compatibility and are found on the internet).